Nigerian PAYE by State: schedules and annual return

Which Nigerian State gets each employee's PAYE, why a run waits until every State is known, and how the schedules and annual return are prepared.

By Achekam · 11 October 2026 · 4 min read · For Running a business businesses in Nigeria

A company with its office on Lagos Island employs a sales team. One lives in Ikeja, two commute from Ogun State, and a new hire has just moved from Ibadan. Many employers would send all their PAYE to Lagos, because that is where the office is. Under Nigerian law, that is wrong for most of this team.

Nigerian PAYE is a State tax, and it goes to the State where the employee lives, not where the employer sits. Getting it wrong means paying one State money owed to another, and then trying to recover it. This article explains the rule, how Achekam applies it, and the schedules and annual return that follow.

The State of residence rule

At the time of writing, under the Nigeria Tax Administration Act 2025, an employee's PAYE goes to the State where the employee lived on 1 January of the tax year, or on the day the employment started.

Applied to the sales team above:

• The Ikeja employee lived in Lagos State on 1 January, so their PAYE goes to Lagos.
• The two Ogun commuters lived in Ogun State on 1 January, so their PAYE goes to Ogun, even though they work in Lagos every day.
• The new hire started after 1 January, living in Oyo State on the day the employment started, so their PAYE goes to Oyo for this year.

An employee who moves house in the middle of the year does not change State for that year; the date that matters is 1 January, or the start date for someone who joined later.

Runs refused while a State is unknown

In Achekam, each Nigerian employee's PAYE is assigned to the State tax authority of their State of residence. A pay run cannot be approved while a State cannot be worked out for any employee, even an employee whose PAYE comes to nothing that month.

That can feel heavy-handed for a junior employee who owes no tax. But the State still needs to know about them, and an unknown State in January is much easier to fix than a wrong one discovered at year end.

Treat the State like a bank account number: a payroll detail that has to be right before anyone is paid. To avoid a refused run on payday:

1. Ask every new employee for their residential address and State on their first day.
2. Each January, ask every employee to confirm where they lived on 1 January.
3. Update the payroll records before the first run of the year.

Schedules per State revenue service

Achekam runs Nigerian payroll with PAYE assigned by State of residence, along with pension, NHF, NSITF and ITF. From approved runs it prepares the monthly schedules:

The schedules download as Achekam's own CSV layout and a PDF, not in each authority's upload template. Where a State wants its own template or portal entry, you will need to transfer the figures into it.

Each schedule is finalised by someone other than the person who prepared it. Achekam does not file or pay any of these. A person files on the authority's portal or through its channel and records the reference it gave, and a second person confirms each payment.

The annual employer return due by 31 January

Every Nigerian employer files an annual employer return for the previous year by 31 January. Lagos State's revenue service extended its 2026 deadline once, to 7 February; do not assume any State will do the same next year. Its answers to common PAYE questions cover the Form H1 annual return, Payer ID registration and personal reliefs under the Nigeria Tax Act 2025.

Achekam prepares the annual employer return data, the information that goes on Form H1, per State, together with the ITF annual return, from the year's approved runs. Because PAYE is split by State all year, the annual return is split the same way: one return for each State in which your employees lived.

Each State's own filing channel

There are 36 State Internal Revenue Services plus the FCT-IRS. Achekam lists them all, but it gives a website only for the FCT-IRS and Kaduna (KADIRS). Every State filing and payment goes through that State's own channel, which you will need to find and set up for each State your employees live in.

The monthly date by which PAYE must be remitted is not settled across the sources. Achekam treats the PAYE remittance day as a contested figure and does not use it until one platform administrator chooses a candidate with a reason and a different administrator approves it. Its filing calendar leaves out a deadline whose rule is awaiting approval or contested, and says why. So ask each State you pay which date it applies, and put those dates in your own calendar.

Your monthly routine

• Confirm every employee's State before the run.
• Approve the run, with a different person approving than preparing.
• Download the schedules and send each State its PAYE schedule.
• Pay each State, pension fund administrator and fund through its own channel.
• Record each filing reference and payment, and have a second person confirm the payments.

Pension is the other decision that stops a Nigerian payroll before it starts; read the pension decision before your first Nigerian payroll. For the sales side of Nigerian tax compliance, see does a small Nigerian business have to charge VAT?.

Before your next run, open the employee list and look for a missing State. It is the one gap that will stop payday.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.